Income Tax Return Filing in India

To help taxpayers understand the policy of this particular department, we will simplify all the information regarding income tax refunds and explain how you can make a request to the department if you want to receive a refund.

• If you have earned, or have invested in foreign assets during the FY.
• If you desire to be involved in the process of obtaining the visa or want to apply for a loan.
• In the same way, if the taxpayer is a company or a firm irrespective of profit or loss is.
• If you have a loss from business/profession or under capital gains head, then you can’t carry forward to the next years unless you file the return before the due date.

If your income is below the basic exemption limit, you will still be required to file your tax return if you meet any of these conditions:

• Deposited more than Rs 1 crore in 'current' bank account: If one has received Rs. 1 crore or more in a financial year in one or more current accounts with a bank, then filing of tax return is compulsory. But, there is no such provision in regard to deposits made in the post office's current account.
• Deposited more than Rs 50 lakh in 'savings' bank account: It becomes compulsory to file an Income Tax Return if the total amount credited or deposited in any of your savings bank accounts is fifty lakh rupees or more in aggregate at any time during the previous year.
• Spent more than Rs 2 lakh on foreign travel: It is mandatory to file the tax return if you claim expenditure of more than Rs 200000 towards foreign travel whether for yourself or any other person.
• Electricity expenditure is more than Rs 1 lakh: Any person has to file a tax return if he has spent more than Rupees one lakh on electricity expenses in the previous year or not.
• TDS or TCS is more than Rs 25000: If tax deducted at source (TDS)/ tax collected at source (TCS) exceeds Rs 25,000 in the previous year. For senior citizens above 60 years, this limit is Rs 50,000.
• Business turnover is more than Rs 60 lakh: Moreover, if you are a businessman and the total sales turnover or gross receipt of your business is more than Rs. 60 lakh in the previous year then it is compulsory that you have to file the tax return.
• Professional income is more than Rs 10 lakh: One has to file a return in Form ITR-4 if he is carrying practice in any profession and his total turnover/gross receipts are or exceed Rs 10 lakh during the previous year.

The central government also has the power to specify one or more class or classes of persons who may be exempted from filing income tax returns in addition to the existing categories of exempt persons such as a person having a total income of less than such basic tax expedition limit, non-resident having income accruing or arising wholly within India, etc.

However, currently, there are no such exemptions of which the central government has given a notification in this regard.

The following are the types of Income tax returns:

ITR-1 OR Sahaj

This Return Form is for a resident individual whose total income for the AY 2024-25 includes:

• Income from Salary/ Pension
• Income from One House Property (other than cases where loss is being adjusted from the previous years).
• Other sources of income such as winnings from the lottery and income from racehorses are omitted.
• Agricultural income up to Rs.5000.

ITR-2 is for the use of an individual or a Hindu Undivided Family (HUF) whose total income for the AY 2024-25 includes:

• Income from Salary/Pension
• Income from House Property
• Miscellaneous Income (including Income from Lottery and Income from Race Horses)
• If you are an Individual Director within a company
• For instance, if at any given time of the year, you have invested in some unlisted equity shares
• As an RNOR and non-resident of the country, I can perceive that every state’s economic growth has its unique idea.
• Income from Capital Gains
• Having any foreign income
• The Agricultural income is more than Rs 5,000
• Possessing any asset including a financial interest in any entity located outside the country, operating an account in any country outside the country, or having a signing authority on such an account.
• If tax has been deducted under section 194N
• In case payment or deduction of tax has been deferred on ESOP

• Total income of more than Rs 50 lakh
• Agricultural income crossing more than Rs. 5000
• If you have taxable capital gains
• If you have income from business or profession
• To have income from House property more than one house
• If you are a Director in a company
• You have been involved with other forms of investment, such as unlisted equity shares at any time during the financial year
• Holding assets including financial interest in any entity outside India, includes signing authority in any account situated in any other country than India
• If you are a resident not ordinarily resident (RNOR) and non-resident
• Having any foreign income
• If you are assessable to tax in terms of the other person’s income in relation to which tax is withheld from the other person
• If tax has been deducted under Section 194N
• If in case payment or deduction of tax has been deferred on ESOP
• If you have any brought forward loss or loss needs to be carried forward under any income head

The existing ITR-3 Form is used by an individual or a Hindu Undivided Family, having income from a proprietary business or from carrying on of a profession. The individuals who earn income from the below-mentioned sources can file ITR-3:

• Continuing on a business or profession or not choosing the presumptive income.
• Any person or company or partnership or other legal entity engaged in any business or profession who is under obligation to keep the accounts books and/or who is under obligation to get his accounts books audited.
• An individual or company has had investments in unlisted equity shares during the financial year.
• The return may include income from House property and Salary/Pension and Income from any other source.
• Income of a person as a partner in the firm.

So, the individuals or HUFs who are not eligible to file ITR-1, ITR-2, and ITR-4, must file ITR-3.

This Return Form should not be used by any person having a total income exceeding Rs. 50 lakhs for the AY 2024-25 which includes Income from Business or Profession. In case, you need to file any of these types of Income, you might have to file your return under ITR-3 or ITR-4 format. Read the details below to understand how to fill ITR-2 form and the prerequisites related to it- ITR-2 Form.

The current ITR-4 applies to individuals and HUFs, Partnership firms (other than LLPs), which are residents and whose total income includes:

• Presumptive business income to be computed under section 44AD or section 44AE
• Income that is received from the profession as per the presumptive income scheme of section 44ADA
• Income from salary or pension up to fifty lakhs Rupees.
• Income from any one house property, not exceeding fifty lakh rupees, where the amount of ‘brought forward loss’ or ‘loss to be carried forward’ is excluded.
• Income from other sources having income not more than fifty lakh of amount, excluding the income derived from lottery and race-horses.

It is important to note that any person earning income from the above-given sources on a freelance basis can also opt for a presumptive scheme if his/ her gross income does not exceed fifty lakh rupees.

A presumptive income scheme under sections 44AD, 44AE, and 44ADA is nothing but the case where an individual or an entity elects to compute his income on a presumed basis, that is, when the income is deemed at a minimum rate computed as a percentage of gross receipts / gross turnover or ownership of commercial vehicles. However, if the business turnover exceeds two crore, the taxpayer will have to file ITR-3.

This Return Form should not be used by any person having a total income exceeding Rs. 50 lakhs for the AY 2024-25 which includes Income from Business or Profession. In case, you need to file any of these types of Income, you might have to file your return under ITR-3 or ITR-4 format. Read the details below to understand how to fill ITR-2 form and the prerequisites related to it- ITR-2 Form.

• Presumptive business income to be computed under section 44AD or section 44AE
• Income that is received from the profession as per the presumptive income scheme of section 44ADA
• Income from salary or pension up to fifty lakhs Rupees.
• Income from any one house property, not exceeding fifty lakh rupees, where the amount of ‘brought forward loss’ or ‘loss to be carried forward’ is excluded.
• Income from other sources having income not more than fifty lakh of amount, excluding the income derived from lottery and race-horses.

ITR-5 is for firms, Limited Liability Partnership(LLP), Association Of Persons(AOPs), Body Of Individuals(BOIs), Artificial Juridical Persons (AJP), Estate of deceased, Estate of Insolvent, Business Trust and Investment fund.

For all other Companies other than companies claiming exemption under section 11 (Income from property held for charitable or religious purposes), this return has to be filed only in electronic form.

In the case of any person including a company which is required to furnish a Return under section 139(4A) or 139(4B) or section 139(4C) or section 139(4D) or section 139(4E) or section 139(4F).

Return under section 139(4A) is to be furnished by every person who has income derived from property held under trust or other legal obligation wholly for charitable or religious purposes or where such income is within a part only of the total income.

The return under section 139(4B) is needed to be filed by a political party if the total income computed without regard to the provision of section 139A is in excess of a maximum amount not chargeable to income-tax.

As per provisions of Sec 139(4C), a return is required to be filed by every –

• Scientific Research Association;
• News agency;
• Any other association or institution referred to in section 10(23A).
• The institution referred to in section 10(23B);
• Fund or institution or university or other educational institution or any hospital or other EDUCATIONAL or Medical institution.
• The return under section 139(4D) has to be filed by every university, college or other institution which is not under any other provision of this section required to furnish a return of income or loss.
• In accordance with section 139(4E), every business trust that is not liable to furnish a return of income or loss under any other provision of this section shall file the return.
• As per section 139(4F) it has been provided that any investment fund mentioned under section 115UB must file this return. It is not necessary to file a return of income or loss under any other of the provisions of this section.